National Retailer Settles $3 Million Class Action for Alleged Deficiencies in FCRA Compliance

Improper Adverse Action Procedures and Dated FCRA Forms Cited

Plaintiff Eric Dante Pitt alleged KMART Corporation failed to comply with FCRA-mandated authorization and disclosure requirements prior to conducting a background check on him for purposes of employment.

Pitt also alleged the company denied him employment because of the results of a background check, and  the adverse employment decision was made before he received a copy of his report and summary of rights or KMART did not provide these in a “meaningful and reasonable time.”

Pitt also alleged the Summary of Rights Under FCRA form KMART eventually sent him was an outdated document, and not the current form required by the CFPB/FTC. KMART denied all of plaintiff claims and further denied any wrongdoing and any liability.

The parties, which have been in extended (and presumably expensive) negotiations since the case was initially filed in October 2011, have reached a proposed class action settlement, which was filed in the United States District Court, Eastern District of Virginia – Richmond Division in late January of 2013.

The settlement proposal includes establishing a $3 million settlement fund for purposes of relief for 64,506 class members, with each receiving a cash payment of $29-$59 (or $18-$38 if plaintiff fee and cost requests are granted).

This case demonstrates the need for employers to periodically review employment screening procedures with their background check provider’s compliance department to prevent unnecessary liability exposure. At a minimum, a review of pre-employment screening authorization forms, FCRA Summary of rights form and adverse/pre-adverse procedures should be undertaken to ensure compliance.

View a copy of the Court Filing: Civil Action No. 3:11-cv-697
Updated Summary of Rights Under FCRA (PDF)
Updated Summary of Rights Under FCRA (Customizable MS Word Doc)


Audit Sheds Light on Spotty Volunteer and Employee Screening Practices by Youth Services Providers

Background Check Practices Audited by NY Office of State Comptroller

Seven of eight municipalities audited by the New York Office of the State Comptroller did not conduct background checks on all individuals charged with delivering youth program services, according to a report submitted by the Division of Local Government and School Accountability.

The report examined screening practices for volunteers, employers and contractors, providing comprehensive results and recommendations for local government officials to “use in effectively managing operations and in meeting the expectations of their constituents.”

While the audit pertains specifically to New York municipalities, all jurisdictions should take note as this lack of consistency in screening processes poses a significant risk both to youth and the programs in which they participate.

View Complete Report: Background Checks at Municipal Youth Programs

Complimentary Luncheon Presentation: Compliant Employment Screening Practices in California

Topic: What you need to know as a California employer – March 20, Montebello, CA

Join A-Check & AppleOne Employment Services For a Special Complimentary Luncheon Presentation: Cracking the DNA Code to a Compliant Background Screening Process For California Employers.

This informative presentation will be held March 20th at Quiet Cannon in Montebello, CA. RSVP required by March 13th. Click here to learn more.